New data from Fitch Ratings shows that the volume of real estate-owned (REO) assets for lenders reached $11 billion in April, a new market record, representing one third of all outstanding delinquencies according to Fitch Ratings. The current and prior month delinquency rates for each of the major property types are:
• Multifamily: 11.64% (12.61% in March)
• Hotel: 10.20% (10.35% in March)
• Industrial: 9.34% (10.91% in March)
• Office: 8.36% (7.99% in March)
• Retail: 7.39% (7.23% in March)
A closer look reveals stark differences in REO trends by state, according to a Costar Group report. In states where non-judicial (power-of-sale) foreclosure is allowed, the inventory of REO assets increased by 64% since the start of last year. Conversely, the inventory in judicial-only states (where the foreclosure process can be notably slower) jumped by 111%. For the current inventory of REO assets, it took an average 179 days to foreclose on properties in power-of-sale states, versus 323 days in judicial-only states. This suggests that the current REO inventory from judicial-only states represents older stock that is finally making its way through the system.
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